Monthly Archives: May 2017

What Duties Do Spouses Owe to Each Other?
Marriage

What Duties Do Spouses Owe to Each Other?

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You have probably heard the term “fiduciary” used in the context of business relationships. In a nutshell, married people have a fiduciary duty to one another in all matters involving marital property. Marital property is anything of value that is obtained or accumulated while a couple is married.

California Family Code § 721 provides that “in transactions between themselves, spouses are subject to the general rules governing fiduciary relationships . . ..” What exactly does that mean? It means a duty of “good faith and fair dealing” with one another. This code section also states that the duty is the same as between business partners who are not married.

In practical terms, each spouse is obligated to ensure that in any action that adds to or diminishes marital property, the interests of the other spouse are protected. Section 721 authorizes spouses to enter into transactions with third persons. This can range from very basic things like buying a television to more complex things like investing retirement funds. The fiduciary duty imposed by the law protects the spouse who is not involved in the transaction.

The general idea of a fiduciary relationship is that one party trusts another to act on her behalf in financial matters. This is true in various business relationships, such as banking and investments, as well as in matters of marital property. The person being trusted has a fiduciary duty to ensure to the greatest extent possible that the trusting person’s financial interests are not harmed.

In many marriages, one of the spouses manages the household finances without much involvement from the other. The managing spouse functions as a trustee of the other spouse’s interest in the marital assets. If the managing spouse harms the other’s interest by error or fraud, then the trusting spouse has a cause of action just as she would against a business partner.

When a marriage is dissolved, disputes often arise regarding management of the marital assets by one spouse or the other. If a spouse is found to have harmed the other’s interest in the marital assets, California Family Code § 1101 permits the court to award an offset to restore the harmed spouse’s share of the marital assets she lost as a result of a transaction. This is true whether or not the managing spouse intended to cause harm. If a spouse is found to have fraudulently harmed the other’s interest, a court is required to grant 100 percent of the value of the fraudulent transaction to the harmed spouse.

In an ideal world, a spouse would never act in a way that is detrimental to the other. But that is not always the case. If you are contemplating divorce or need advice regarding matters of marital property, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger are experienced in difficult divorce proceedings and what it takes to sort out complexities in the marital estate. Call today to see how we can help you: (415) 293-8314.


 

Who “Owns” Money Damages Recovered by One Spouse During the Marriage?
Marriage

Who “Owns” Money Damages Recovered by One Spouse During the Marriage?

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Money damages received by a spouse as compensation for a personal injury that occurred during the marriage are owned by both parties. The money is marital property. As with most things that come up in the dissolution of a marriage, however, there are additional details to be considered.

While California Family Code § 780 provides that damages received for an injury that occurred during marriage are marital property, Section 781 states that if the injury occurred after entry of a final divorce decree or after separation of the parties, the money damages  are the separate property of the injured party. It is important to recognize, however, that whether a couple is considered legally separated can be complicated. If there is a formal separation approved by the court, there is no question. If not, the court considers various factors, including living arrangements, comingling of funds, and other indications of whether the couple otherwise functioned as if they were married.

If a couple dissolves a marriage during which one of the parties received money damages, California Family Code § 2603 provides for the allocation of those funds to the spouse who received them. But that is assuming the funds can be distinguished from other marital funds and have not been comingled. If, for example, the money was set aside in an investment account in the injured party’s name, that money, although marital property during the marriage, would be allocated to the injured spouse at the time of dissolution.

If the money damages were comingled with other marital funds, then they may be considered marital property at the time of dissolution. Where comingling is concerned, money damages are treated essentially the same as property owned by a spouse before the marriage. If the owning spouse allows the money or property to be comingled with other marital property, it is treated as part of the marital estate at the time of dissolution.

Once again, though, there are more details. Section 2603 also authorizes the court to allocate some of those funds to the non-injured spouse “after taking into account the economic condition and needs of each party, the time that has elapsed since the recovery[,] . . . and all other facts of the case.” If the court makes such an allocation, however, no more than one-half of the funds may be so allocated.

Division of the marital estate at the time a marriage is dissolved can be highly contentious and complicated. While state law provides the framework for issues such as money damages for personal injury, it also gives the courts broad discretion to achieve a fair outcome for both parties. If you are facing a divorce proceeding, especially one that involves a complicated estate, you should consult with an experienced California lawyer. The attorneys at the Law Offices of Judy L. Burger are well-versed in difficult divorce proceedings. Call today to see how we can help you: (415) 293-8314.

Who Controls Marital Property During the Marriage?
California Divorce, Marriage

Who Controls Marital Property During the Marriage?

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The assets a couple accumulates during marriage, for the most part, are marital property. This includes money and things of value such as automobiles, furnishings, and real property like the marital home. Each spouse is a 50 percent owner of the assets. There are circumstances under which property owned by one of the parties before marriage may become marital property, but that is beyond the scope of this article.

Marital property may be controlled by either or both parties to a marriage. Both own half of the property, and both have the authority to manage or dispose of the property but with this limitation: the controlling spouse cannot act in a way that diminishes the other spouse’s 50 percent share of the asset’s value.

The underlying concept of control of marital property is that marriage is a contract that imposes a “fiduciary duty” on each party. In the context of this discussion, the duty requires the spouse who exercises control over a particular asset to do so without damaging the other’s 50 percent interest in the property.

A good example of both the power to control an asset and the fiduciary duty is a car owned by a couple. Most married people officially title a car as belonging to John or Jane Doe. This means that in the eyes of the State of California, either John or Jane can assign the title of the car to a third person.

According to California Family Code § 1100, however, the party disposing of the car may not do so for less than “fair and reasonable” value without getting the consent of the other spouse. In the case of the car, the spouse could legally sell it according to state motor vehicle law, but if he did so for $10,000 less than its value without his spouse’s consent, the non-consenting spouse would have a claim against him.

In this example, the spouse selling the car has a fiduciary duty to the other spouse to maintain the value of her 50 percent interest in the fair and reasonable value of the car at the time of its disposition. A failure to do so results in the selling spouse being liable for that loss.

In the case of real property, it is little different. California Family Code § 1102 requires that any sale or encumbrance of real property, or its lease for more than one year, requires execution by both spouses. There is much less room for a spouse to take unilateral action without the other spouse’s agreement. A spouse is, however, authorized to encumber her half of real property for the purpose of engaging counsel once a proceeding for dissolution of the marriage has been commenced.

If you have concerns about your spouse’s management of marital assets, you should consult with an experienced California divorce lawyer. The attorneys at the Law Offices of Judy L. Burger will provide authoritative legal support tailored to your specific situation. Make the call today to learn how our attorneys can help: (415) 293-8314.


 

How is Child Custody Handled During Divorce Proceedings?
California Divorce, Child Custody

How is Child Custody Handled During Divorce Proceedings?

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One of the first things that happens when a couple decides to split up is that they start living in separate places. That seems like the normal course of events. And one of the common issues you hear about when a divorce is finalized is child custody arrangements. But what about child custody during the period of separation? Sometimes, that period can last for a long time.

The number one consideration in child custody under California law is the “best interest of the child.” This is true whether a court must make a determination while a divorce is pending or when it is actually granted.

A separating couple has the right to decide how to manage child custody and rearing. Similarly, they have the right to come to terms on child custody that will endure even after a divorce is granted. The difference is that a court must order the arrangements when the divorce is finalized. Prior to that point, a court will not be involved in child custody arrangements unless asked to do so by either or both parties.

According to California law, when a petition for divorce is filed, it may be accompanied by a petition for a temporary custody order. A petition for custody may also be filed any time after the filing of the divorce petition. If both parties are in agreement as to the custody of the children, the court will usually enter an order granting the temporary custody—so long as their agreement is in the best interest of the child. If the parents do not agree, the court is empowered to grant a temporary custody order based only on the requesting party’s petition. Within 20 days, however, the court will hold a hearing to allow both parents to argue about the appropriateness of the order.

Granting an order of custody based only one party’s request (known as an ex parte order) may only be made when it has been shown that immediate harm to the child may occur or that the child will be removed from the state. In that regard, when granting an ex parte custody order, the court is also required to enter an order to restrain the parent gaining temporary custody from removing the child from the state during pendency of the custody issue.

The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including temporary and permanent child custody orders. We can help you put your best foot forward in advocating for the best interest of your children. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.

Does California Recognize Common Law Marriages?
Marriage

Does California Recognize Common Law Marriages?

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It seems like no one gets married anymore. We all have family members and friends who choose to live with their significant others rather than “tie the knot.” We have all also probably heard of common law marriage. Doesn’t that mean that people living together are actually tying the knot even though they may think otherwise? In California, perhaps surprisingly, that is not the case. The Golden State has not recognized common law marriage since 1895.

Marriage laws are governed by state laws. Common law marriage was a function of older times when states were either not yet states or had not yet formally codified marriage rules. Today, only 10 states and the District of Columbia recognize common law marriage.

While California law does not allow for common law marriage, it may recognize one that was effected in a state that does permit common law marriage. Such was the case in the matter of In re Marriage of Smylko. In this case, the Smylkos had been formally married in Alabama in 1941, but they divorced in 1953. In 1957, they moved back in together and again lived as husband and wife in such a way as constituted a common law marriage under Alabama law.

The couple moved to California in 1960, where they continued to live together. In 1976, Mr. Smylko moved to Hawaii and subsequently remarried. He continued to send money to his common law wife in California for another five years. When he stopped, his California wife filed an action to “determine the validity of her marriage.” The California court ruled that there was a valid marriage recognized in that state due to its having existed in the state of Alabama before the Smylkos moved to California.

This case, which was decided in 1986, does not mean that any common law marriage from another state will be found to constitute marriage in California. Each case is evaluated on its own particular facts as well as the laws of the state where the marriage occurred.

If you have established a relationship that is commensurate with marriage within the state of California, a claim of common law marriage will not survive. If, however, you came here from another state under circumstances that might fulfill the common law marriage requirements in that state, and you need for that marriage to be recognized for whatever reason, you might have a strong argument.

The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including what constitutes a legal marriage. We can advise you about the many different issues that can come into play when a marriage is in question. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.